Income tax
Rates
Income tax is levied on income after deduction of the personal allowance. Income along with the final earned income and dividend income will be taxed in a specific order. Income and Savings Income Dividends and savings allowances are still a part of an individual’s total revenue. The starting rate applies only to band savings income. 0% rate is not available if the entire starting rate subject to tax on non-savings income exceeds the band.
The Scottish Parliament sets the income tax rates, and these rates are the rates applicable to non-savings and dividend income for Scottish residents. Income tax is paid to Wales on non-savings dividend income. Welsh resident taxpayers continue to pay the same amount of income tax rates using UK rates and bands. Total income tax rate = UK income tax + Welsh rate of income tax. Savings income and dividend income are taxed using UK tax rates and bands.
Type | Band of taxable income (£) | Rate (%) | Rate if dividends (%) |
---|---|---|---|
Starting rate for savings | 0 - 5,000 | 0 | N/a |
Basic rate | 0 - 37,500 | 20 | 7.5 |
Higher rate | 37,501 - 150,000 | 40 | 32.5 |
Additional rate | Over 150,000 | 45 | 38.1 |